Every building I've taken over has the same secret hiding spot: a file drawer full of vendor contracts nobody has read in years. The rent roll gets all the attention. The contracts are where the money quietly leaks out.
When I take over a property, one of the first things I do is pull every service contract: elevator maintenance, extermination, landscaping, snow removal, waste hauling, laundry equipment, boiler service. Not the glamorous part of the business plan. But it is one of the fastest places I know to find real, permanent savings.
The most common problem is auto-renewal. A three-year elevator contract rolls over for another three years, and the annual escalator kicks in again, and nobody notices because the bill just keeps getting paid. I once found a building paying a 15% premium over the going rate because a contract had auto-renewed twice without anyone asking a single question. One phone call and one round of bids fixed it.
The second most common problem is paying for scope you don't need. An extermination contract that includes quarterly 'deep treatments' at extra cost on top of a monthly service that already covers the same thing. A landscaping bid that prices snow removal into twelve equal monthly payments so you stop noticing it in July. Line by line, these things look small. Add them across a building, and you're looking at real money.
My rule is simple: every contract gets bid out at least every two or three years, and I get at least three bids. It doesn't mean I fire the incumbent every time. A vendor who knows the building and answers the phone at midnight is worth something. But nothing keeps an incumbent honest like knowing the work was shopped. The best outcome is usually your current vendor matching a lower bid, and now you're paying less for the team you already trust.
Read the termination clause before you sign anything new. Some contracts renew with sixty days' notice required and give you a two-week window buried in the renewal month to cancel. Miss the window and you're locked in for another term. I keep a one-page schedule of every contract, the end date, and the notice deadline. It takes an afternoon to build and it has saved me more than once.
The other move people miss: consolidate across buildings. If you run several properties, you don't have five extermination contracts, you have one extermination contract with five locations. Vendors will cut their pricing meaningfully for guaranteed volume, and you cut your paperwork too. Scale is an advantage you should actually use.
None of this is exciting. Nobody brags at a conference about renegotiating a waste hauling contract. But this is the expense side of the game, and the expense side is where buildings get won or lost. A dollar of expense you cut is worth a dollar of income you didn't have to raise rent to get — and it's worth it every single year, not just once.
Pull the drawer open. Read the contracts. Bid the work. It is the least glamorous job in real estate, and one of the most profitable.
← All insights